Enhancing Palm Oil Governance: Comparing Presidential Regulation No. 44/2020 and No. 16/2025

Background: Strengthening Palm Oil Sustainability Through Policy Reform

To reinforce its commitment to sustainable palm oil production, the Government of Indonesia issued Presidential Regulation No. 16 of 2025, replacing the earlier Presidential Regulation No. 44 of 2020. Both regulations focus on the Indonesian Sustainable Palm Oil (ISPO) certification system, but the 2025 update brings stronger institutional frameworks, clearer responsibilities, and more inclusive support for all actors—especially smallholders.

Key Differences Between Presidential Regulation No. 44/2020 and No. 16/2025C

Category	Presidential Regulation No. 44/2020	Presidential Regulation No. 16/2025
Legal Status	ISPO was formally established as a national sustainability certification system for the palm oil sector through a presidential mandate	Officially repealing Presidential Regulation No. 44/2020, ISPO will be reinforced as a binding national certification system with enhanced legal authority
Scope of ISPO Certification	It applies to plantation companies and smallholder farmers, focusing primarily on cultivation and processing activities	Expand coverage to include plantation companies, palm oil downstream industries, and bioenergy operations (e.g., biomass, biogas)
Implementation Obligation	Mandatory for plantation companies with a phased implementation approach for smallholders	Mandatory for all sectors with specific timelines: effective immediately for companies, within 2 years for downstream and bioenergy sectors, and within 4 years for smallholders
Institutional Setup	ISPO Committee operated under the Ministry of Agriculture with representation from relevant stakeholders.	Establishes an Independent ISPO Commission reporting directly to the President, supported by a dedicated secretariat and operational units.
Transparency Principle	Transparency was introduced as Principle 6 but treated more as an encouraged practice rather than a mandatory requirement	Transparency is now a binding requirement, explicitly mandated within the certification principles
Monitoring & Evaluation	Managed internally by committee	Adds mandatory annual reporting to the President
Sanctions	Enforced by the Ministry	Includes clearer administrative sanctions and oversight mechanisms
Stakeholder Involvement	Encouraged informally	Defines roles for the private sector, civil society, and academics
Funding for Certification	Government support is possible through various channels	A more structured approach, especially for initial certifications

Why This Matters

• Clearer Governance The new regulation brings more certainty to how ISPO is implemented and monitored, with an independent commission and a stronger legal foundation.

• Increased Accountability Mandatory annual reporting to the President ensures consistent evaluation and improvement of the certification process.

• More Inclusive Support Smallholders now receive clearer and more structured support—both technical and financial—ensuring they are not left behind.

Conclusion

Presidential Regulation No. 16 of 2025 marks a significant improvement in the governance of Indonesia’s palm oil sector. By replacing the 2020 regulation, it strengthens implementation, promotes accountability, and ensures that the push for sustainable palm oil includes everyone—from large companies to individual smallholders.